QBE to Acquire U.K. Property Portfolio From Endurance

The European division of Australia's QBE Insurance Ltd. said it will acquire the renewal rights to the portfolio of industrial and commercial property business written by Endurance Worldwide Insurance Ltd. out of the London market.

QBE European Operations said the deal is "another significant step forward" in its drive to build a major U.K. property underwriting operation. The portfolio to be acquired is mainly U.K. business, and generated about 30 million pounds (33.9 million euros) in gross premiums in 2007, QBE said.

A QBE EO spokeswoman said the company won't disclose terms of the deal at this time.

The deal will see the 30 employees of the Endurance Risk Practice team in London move to QBE's Plantation Place offices.

"The team has a very similar underwriting culture and the Endurance portfolio works well with QBE's risk appetite balance and our current London market property portfolio," said Bernard Mageean, managing director of property for QBE EO, in a statement. He added that the Endurance team will add risk engineering and risk analysis specialists to QBE's in-house risk management and geographical analysis capabilities.

Steve Burns, chief executive of QBE EO, said in a statement that the deal is part of the division's plan to re-position its property operations growth and become a top-5 player in the U.K. specialist commercial property sector.

According to Simon Minshall, managing director for Endurance Worldwide, the sale is part of the company's decision to focus its U.K. operation on its core reinsurance business.

QBE said that of the 280 million pounds of property business it writes out of the United Kingdom, just over 100 million pounds is underwritten by its London market company and regional operations.

Growth by acquisition has been a feature of Australia-based QBE (ASX: QBE) in recent years. Some of its most recent acquisitions include U.S.-based underwriting agency ZC Sterling Corp. (BestWire, Nov. 26, 2008), and PMI Mortgage Insurance Ltd. of Australia and New Zealand. QBE tried and failed to acquire its biggest domestic rival, Insurance Australia Group Ltd., last May (BestWire, May 21, 2008).

Endurance Specialty Holdings Ltd. (NYSE: ENH) on Feb. 12 reported fourth-quarter net income of US$16.9 million (13.2 million euros), down 88.9% from the same period a year earlier. Net income for the year fell 81.1% to US$98.6 million. Most of the lost income was attributed to investment and catastrophe losses, along with increased foreign exchange losses.

QBE Insurance (Europe) Ltd. and Endurance Worldwide Holding Ltd. each currently has a Best's Financial Strength Rating of A (Excellent).

(By David Pilla, international editor, BestWeek: [email protected])